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October 08, 2015

SaaS versus Cloud Computing: What’s the difference?

Evolution in the world of IT technology is unstoppable. It’s as though new services hit the market every day. And many of these services have the most abstract names. We talk constantly about The Internet of Things, SaaS, IaaS, Cloud and Web 2.0. But what exactly are they?

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In discussions with clients, I often notice that Cloud Computing and Software as a Service (SaaS) are confused, for instance. So the person I’m with might be talking about SaaS, when he actually means the Cloud. And to complete the confusion, the terms ‘public,’ ‘private’ and ‘hybrid’ then get bandied across the table. So what exactly is Cloud Computing, and how does it differ from SaaS?

To keep things simple: SaaS is a component of Cloud Computing. But where does the difference lie?

The cloud is the computer
Cloud Computing makes hardware, software and data available via the internet. The concept of Cloud Computing assumes that the local computer is replaced by the internet: “The cloud is the computer.” The Cloud can be regarded as a computer that is based outside your physical location. In this system, storing and managing data occurs in enormous data centers spread around the world. And users can access it from any location they wish. The local, physical computer is then only needed to operate hardware and software.

24/7 access to data with SaaS
As the name already says: SaaS is software which is delivered as a service. It’s the part of Cloud Computing concerned specifically with making software available online. This is how users have increasing access to software programs via the internet. The data SaaS users store using these online applications is saved in the Cloud rather than on local computers. This means that as long as they have a working internet connection, users have access to the application and the associated data from anywhere. It also means the client no longer buys a software licence, but rents it instead and pays a monthly or annual fee for using the online service. A major advantage of SaaS is that the provider also takes care of the application management. So organizations no longer have to make their own back-ups, and the maintenance and installation of new versions and updates occurs automatically. 

Now it might appear that a Cloud environment can only be used with a SaaS licence. Nothing could be further from the truth. With a perpetual licence, where you use software for an indefinite period, you may also choose to install the software at your own location (on-premises) or on the Cloud platform of the software supplier.

In short, Cloud Computing is the overall umbrella phenomenon, while SaaS is a component of it. SaaS works specifically by making the software available, while Cloud Computing makes not just software, but also hardware and infrastructure available online.

Henk Laracker
VP Research & Development